1. Water Sector Collaboration on Effective Utility Management

2. Outline
Background
Ten Attributes of Effectively-Managed Water Sector Utilities
Keys to Management Success
Example Measures
Example Resources
Supporting Strategy Elements
Next Steps

3. Background
In July 2005, EPA Office of Water convened water and wastewater utility managers to discuss effective management practices. Outcomes included:
A draft list of “Attributes of a Sustainably-Managed Utility”
A set of “critical success factors” for effective utility management
Following this meeting, EPA and Water Associations (the “Collaborating Organizations”) explored ways to collaborate to promote effective utility management

4. 11/24/2018
Background, Cont’d
May 2, 2006: AMWA, APWA, AWWA, EPA, NACWA, NAWC, and WEF (the Collaborating Organizations) signed a Statement of Intent to formalize an effort to promote effective utility management
See
Statement included a commitment to produce a joint strategy to identify, encourage, and recognize excellence in water and wastewater utility management
Association of Metropolitan Water Agencies
American Public Works Association
American Water Works Association
National Association of Clean Water Agencies
National Association of Water Companies
United States Environmental Protection Agency
Water Environment Federation

5. 11/24/2018
Background, Cont’d
The Collaborating Organizations chartered the Effective Utility Management Steering Committee to advise on a future, joint water utility sector management strategy
The Steering Committee was composed of 16 water and wastewater utility managers from across the country
Steering Committee Members
David Brosman, El Paso Water Utilities Public Service Board
John Cook, Advanced Data Mining International, formerly of Charleston Water System†
Stephen Densberger, Pennichuck Water Service Co.
JC Goldman, Jr., United Water*
Dan Hartman, City of Golden Public Works*
Scott Haskins, Seattle Public Utilities*
Mary Lappin, Kansas City Water Services Department
Ed McCormick, East Bay Municipal Utility District†
Patricia Mulroy, Las Vegas Valley Water District
Howard Neukrug, Philadelphia Water
Dave Rager, Greater Cincinnati Water Works
Brian Ramaley, Newport News Waterworks
Joseph Superneau, Springfield Water and Sewer Commission†
Diane Taniguchi-Dennis, City of Albany Dept of Public Works†
Billy Turner, Columbus Water Works*
John Young, Jr., American Water*

6. Background, Cont’d
The Steering Committee’s 9-month collaboration involved:
Two in-person meetings
Two subgroups (measures and resources)
Two focus groups to provide input, feedback
Several conference calls
Development of a final findings and recommendations report to the Collaborating Organizations, delivered March 31, 2007

7. Final Results and Recommendations
Identified four primary building blocks of effective water utility management:
Attributes of Effectively-Managed Water Sector Utilities
Keys to Management Success
Example Water Utility Measures
Water Utility Management Resources

8. Ten Attributes of Effectively Managed Utilities
The Ten Attributes of Effectively-Managed Water Sector Utilities provide a succinct indication of where effectively-managed utilities focus and what they strive to achieve
They can be viewed as a continuum of, or a set of building blocks for, management improvement opportunities
The Steering Committee recommended that the water utility sector adopt and utilize the Attributes as a basis for promoting improved management within the sector

9. Attributes, Cont’d The Attributes:
11/24/2018
Attributes, Cont’d
The Attributes:
The Attributes are not listed in a particular order as utility managers will determine their relevance and relative importance based on utility circumstances
Product Quality
Infrastructure Stability
Customer Satisfaction
Operational Resiliency
Employee and Leadership Development
Community Sustainability
Operational Optimization
Water Resource Adequacy
Financial Viability
Stakeholder Understanding and Support
For those utilities with a strong need for guidance on where to start, implementation experience suggests the Product Quality and Customer Satisfaction Attributes—as critical, basic aspects of utility operation—are strong candidates for initial attention. Even as all utilities will need to approach improved management one step at a time, utility mangers involved in the development of the Attributes believe increasingly excellent, overall utility management will emerge when utilities address more, and eventually all, of the Attributes.

10. Attributes, Cont’d
Product Quality: Produces potable water, treated effluent, and process residuals in full compliance with regulatory and reliability requirements and consistent with customer, public health, and ecological needs.

11. Attributes, Cont’d
Customer Satisfaction: Provides reliable, responsive, and affordable services in line with explicit, customer-accepted service levels. Receives timely customer feedback to maintain responsiveness to customer needs and emergencies.

12. Attributes, Cont’d
Employee and Leadership Development: Recruits and retains a workforce that is competent, motivated, adaptive, and safe-working. Establishes a participatory, collaborative organization dedicated to continual learning and improvement. Ensures employee institutional knowledge is retained and improved upon over time. Provides a focus on and emphasizes opportunities for professional and leadership development and strives to create an integrated and well-coordinated senior leadership team.

13. Attributes, Cont’d
Operational Optimization: Ensures ongoing, timely, cost-effective, reliable, and sustainable performance improvements in all facets of its operations. Minimizes resource use, loss, and impacts from day-to-day operations. Maintains awareness of information and operational technology developments to anticipate and support timely adoption of improvements.

14. Attributes, Cont’d
Financial Viability: Understands the full life-cycle cost of the utility and establishes and maintains an effective balance between long-term debt, asset values, operations and maintenance expenditures, and operating revenues. Establishes predictable rates—consistent with community expectations and acceptability—adequate to recover costs, provide for reserves, maintain support from bond rating agencies, and plan and invest for future needs.

15. Attributes, Cont’d
Infrastructure Stability: Understands the condition of and costs associated with critical infrastructure assets. Maintains and enhances the condition of all assets over the long-term at the lowest possible life-cycle cost and acceptable risk consistent with customer, community, and regulator-supported service levels, and consistent with anticipated growth and system reliability goals. Assures asset repair, rehabilitation, and replacement efforts are coordinated within the community to minimize disruptions and other negative consequences.

16. Attributes, Cont’d
Operational Resiliency: Ensures utility leadership and staff work together to anticipate and avoid problems. Proactively identifies, assesses, establishes tolerance levels for, and effectively manages a full range of business risks (including legal, regulatory, financial, environmental, safety, security, and natural disaster-related) in a proactive way consistent with industry trends and system reliability goals.

17. Attributes, Cont’d
Community Sustainability: Is explicitly cognizant of and attentive to the impacts its decisions have on current and long-term future community and watershed health and welfare. Manages operations, infrastructure, and investments to protect, restore, and enhance the natural environment; efficiently use water and energy resources; promote economic vitality; and engender overall community improvement. Explicitly considers a variety of pollution prevention, watershed, and source water protection approaches as part of an overall strategy to maintain and enhance ecological and community sustainability.

18. Attributes, Cont’d
Water Resource Adequacy: Ensures water availability consistent with current and future customer needs through long-term resource supply and demand analysis, conservation, and public education. Explicitly considers its role in water availability and manages operations to provide for long-term aquifer and surface water sustainability and replenishment.

19. Attributes, Cont’d
Stakeholder Understanding and Support: Engenders understanding and support from oversight bodies, community and watershed interests, and regulatory bodies for service levels, rate structures, operating budgets, capital improvement programs, and risk management decisions. Actively involves stakeholders in the decisions that will affect them.

20. Keys to Management Success
Leadership
Strategic Business Planning
Organizational Approaches
Measurement
Continual Improvement Management Framework
Represent approaches and systems that foster utility management
The Steering Committee recommended that the Keys to Management Success be referenced and promoted with the Attributes to enable more effective utility management within the sector

21. Keys to Management Success, Cont’d
1. Leadership
Plays a critical role in effective utility management, particularly in the context of driving and inspiring change within an organization
‘’Leaders” refers both to individuals who champion improvement, and to leadership teams that provide resilient, day-to-day management continuity and direction
Effective leadership ensures the utility’s direction is understood, embraced, and followed on an ongoing basis throughout the management cycle

22. Keys to Management Success, Cont’d
2. Strategic Business Planning
Strategic business planning helps utilities balance and drive integration and cohesion across the Attributes
Involves:
taking a long-term view of utility goals and operations
establishing an explicit vision and mission that guide utility objectives, measurement efforts, investments, and operations

23. Keys to Management Success, Cont’d
3. Organizational Approaches
Organizational approaches can be critical to management improvement
Include:
establishing a “participatory organizational culture” that actively seeks to engage employees in improvement efforts
deploying an explicit change-management process
utilizing implementation strategies that seek early, step-wise victories build momentum and motivation

24. Keys to Management Success, Cont’d
4. Measurement
A focus and emphasis on measurement is the backbone of successful continual improvement management and strategic business planning
Successful measurement efforts tend to be viewed on a continuum, starting with basic internal tracking and moving on, as needed and appropriate, to:
more sophisticated base-lining and trend analysis
development of key performance indicators
inclusion of externally-oriented measures speaking to community sustainability interests

25. Keys to Management Success, Cont’d
5. Continual Improvement Management Framework
Most frequently implemented through a complete, start-to-finish management system
Plays a central role in effective utility management and is viewed as a critical management strategy to make progress in the context of the Attributes
Includes:
conducting an honest and comprehensive self-assessment
establishing explicit performance objectives and targets
implementing measurement activities
responding to evaluations through the use of an explicit change management process

26. Water Utility Measures
The Steering Committee strongly affirmed measurement as critical to effective utility management
The Committee acknowledged that measurement can be challenging and time consuming
The Committee identified a set of high-level, illustrative example water utility measures related to the Attributes and recommended that these or other example utility measures be made available in a future sector strategy

27. Measures, Cont’d Sample of preliminary example measures:
Amount of distribution system water loss
Attribute: Operational Optimization
Does the utility have a current all-hazards disaster readiness response plan (yes/no)?
Attribute: Operational Resiliency
Does the utility consult regularly with stakeholders (yes/no)?
Attribute: Stakeholder Understanding and Support

28. Measures, Cont’d
The Steering Committee recommended a longer-term initiative to identify a cohesive set of targeted, generally applicable, individual water sector utility measures
Goal: to provide robust measures individual utilities to use in gauging and improving operational and managerial practices and for communicating with external audiences such as utility boards, rate payers, and community leaders

29. Water Utility Management Resources
The Steering Committee believed that
water utilities are interested in tools that can support management progress
many utilities would benefit from a “helping hand” that can guide them to useful management resources, particularly in the context of the Attributes
The Steering Committee recommended that the future sector strategy include a “resource toolbox” linked to the Attributes and compiled a preliminary list of management resources that could be used as a starting point

30. Supporting Strategy Elements
The Steering Committee also identified four supporting strategy elements:
explicit advocacy
community education and outreach
recognition, and
financial incentives
Recommended that these also be pursued over time to support the primary building blocks

31. Next Steps for the Collaboration and Sector Strategy
11/24/2018
Next Steps for the Collaboration and Sector Strategy
The Collaborating Organizations have identified the following actions to build upon the recommendations and work of the Steering Committee
Short-term actions:
Implement a coordinated and comprehensive rollout of a sector strategy as soon as possible
Create a standard presentation kit that could be used by Collaborating Organizations, utilities, and others to explain the initiative and its findings
All commitments made by EPA and the other signatories in this document are subject to the availability of funds and budget priorities. Nothing in this document, in and of itself, obligates EPA or the other signatories to expend funds or enter into any contract, or other agreement or incur other financial obligations.

32. Next Steps, Cont’d Short-term actions, cont’d:
Create a basic resource toolbox to help utilities manage more effectively based on the Attributes and the Keys to Management Success
Develop a “primer” to help utility managers understand the background and objectives of the initiative and help them use the Attributes and apply the Keys to Management Success
Jointly sponsor web casts and other educational sessions to describe the initiative and its findings

33. Next Steps, Cont’d Long-term actions
Explore options to link the Attributes into existing Collaborating Organizations’ recognition or awards programs, as appropriate, and consider the need for a joint sector-wide recognition/awards program for utilities that adopt management strategies based on the Attributes and Keys to Management Success
Explore partnerships with organizations interested in the Steering Committee’s final report and in promoting and encouraging the report’s findings and recommendations within their individual membership bases

34. Next Steps, Cont’d Long-term actions
Develop a cohesive set of targeted, generally-applicable, individual water sector utility measures that could be used to gauge progress. This effort could build on existing programs and other sources of information
Continue to communicate and coordinate efforts to promote effective utility management

35. Water Sector Collaboration on Effective Utility Management
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